3915.16
Interstate insurance product regulation code adopted.

The "Interstate Insurance Product Regulation Compact" is
intended to help states join together to establish an interstate compact to
regulate designated insurance products. Pursuant to terms and conditions of
this section, the state of Ohio seeks to join with other states and establish
the interstate insurance product regulation commission, and thus become a
member of the interstate insurance product regulation commission.

The "Interstate Insurance Product Regulation Compact" is hereby
enacted into law and entered into with all other states which have legally
joined in the compact:

"Interstate Insurance Product Regulation Compact"

Article I. Purposes

The purposes of this Compact are, through means of joint and
cooperative action among the Compacting States:

1.
To promote and protect the interest of
consumers of individual and group annuity, life insurance, disability income
and long-term care insurance products;

2.
To develop uniform standards for insurance
products covered under the Compact;

3.
To establish a central clearinghouse to
receive and provide prompt review of insurance products covered under the
Compact and, in certain cases, advertisements related thereto, submitted by
insurers authorized to do business in one or more Compacting States;

5.
To improve
coordination of regulatory resources and expertise between state insurance
departments regarding the setting of uniform standards and review of insurance
products covered under the Compact;

6.
To create the Interstate Insurance Product
Regulation Commission; and

7.
To
perform these and such other related functions as may be consistent with the
state regulation of the business of insurance.

Article II. Definitions

For purposes of this Compact:

1.
"Advertisement" means any material
designed to create public interest in a Product, or induce the public to
purchase, increase, modify, reinstate, borrow on, surrender, replace or retain
a policy, as more specifically defined in the Rules and Operating Procedures of
the Commission.

2.
"Bylaws" means
those bylaws established by the Commission for its governance, or for directing
or controlling the Commission's actions or conduct.

3.
"Compacting State" means any State which
has enacted this Compact legislation and which has not withdrawn pursuant to
Article XIV, Section 1, or been terminated pursuant to Article XIV, Section 2.

4.
"Commission" means the
"Interstate Insurance Product Regulation Commission" established by this
Compact.

5.
"Commissioner" means
the chief insurance regulatory official of a State including, but not limited
to commissioner, superintendent, director or administrator.

6.
"Domiciliary State" means the state in
which an Insurer is incorporated or organized; or, in the case of an alien
Insurer, its state of entry.

7.
"Insurer" means any entity licensed by a State to issue contracts of insurance
for any of the lines of insurance covered by this Act.

8.
"Member" means the person chosen by a
Compacting State as its representative to the Commission, or his or her
designee. The superintendent of insurance or the superintendent's designee
shall serve as the member to the Commission for the state of Ohio.

9.
"Non-compacting State" means any State
which is not at the time a Compacting State.

10.
"Operating Procedures" means procedures
promulgated by the Commission implementing a Rule, Uniform Standard or a
provision of this Compact.

11.
"Product" means the form of a policy or contract, including any application,
endorsement, or related form which is attached to and made a part of the policy
or contract, and any evidence of coverage or certificate, for an individual or
group annuity, life insurance, disability income or long-term care insurance
product that an Insurer is authorized to issue.

12.
"Rule" means a statement of general or
particular applicability and future effect promulgated by the Commission,
including a Uniform Standard developed pursuant to Article VII of this Compact,
designed to implement, interpret, or prescribe law or policy or describing the
organization, procedure, or practice requirements of the Commission, which
shall have the force and effect of law in the Compacting States.

13.
"State" means any state, district or
territory of the United States of America.

14.
"Third-Party Filer" means an entity that
submits a Product filing to the Commission on behalf of an Insurer.

15.
"Uniform Standard" means a standard
adopted by the Commission for a Product line, pursuant to Article VII of the
Compact, and shall include all of the Product requirements in aggregate;
provided, that each Uniform Standard shall be construed, whether express or
implied, to prohibit the use of any inconsistent, misleading or ambiguous
provisions in a Product and the form of the Product made available to the
public shall not be unfair, inequitable, or against public policy as determined
by the Commission.

Article III. Establishment of the Commission and Venue

1.
The Compacting States hereby create and
establish a joint public agency known as the "Interstate Insurance Product
Regulation Commission." Pursuant to Article IV, the Commission will have the
power to develop Uniform Standards for Product lines, receive and provide
prompt review of Products filed therewith, and give approval to those Product
filings satisfying applicable Uniform Standards; provided, it is not intended
for the Commission to be the exclusive entity for receipt and review of
insurance product filings. Nothing herein shall prohibit any Insurer from
filing its product in any State wherein the Insurer is licensed to conduct the
business of insurance; and any such filing shall be subject to the laws of the
State where filed.

2.
The
Commission is a body corporate and politic, and an instrumentality of the
Compacting States.

3.
The
Commission is solely responsible for its liabilities except as otherwise
specifically provided in this Compact.

4.
Venue is proper and judicial proceedings
by or against the Commission shall be brought solely and exclusively in a Court
of competent jurisdiction where the principal office of the Commission is
located.

Article IV. Powers of the Commission

The Commission shall have the following powers:

1.
To promulgate Rules, pursuant to Article
VII of this Compact, which shall have the force and effect of law and shall be
binding in the Compacting States to the extent and in the manner provided in
this Compact;

2.
To exercise its
rule-making authority and establish reasonable Uniform Standards for Products
covered under the Compact, and Advertisement related thereto, which shall have
the force and effect of law and shall be binding in the Compacting States, but
only for those Products filed with the Commission, provided, that a Compacting
State shall have the right to opt out of such Uniform Standard pursuant to
Article VII, to the extent and in the manner provided in this Compact, and,
providedfurther, that any Uniform Standard established by the Commission for
long-term care insurance products may provide the same or greater protections
for consumers as, but shall not provide less than, those protections set forth
in the National Association of Insurance Commissioners' Long-term Care
Insurance Model Act and Long-Term Care Insurance Model Regulation,
respectively, adopted as of 2001. The Commission shall consider whether any
subsequent amendments to the NAIC Long-Term Care Insurance Model Act or
Long-Term Care Insurance Model Regulation adopted by the NAIC require amending
of the Uniform Standards established by the Commission for long-term care
insurance products;

3.
To receive
and review in an expeditious manner Products filed with the Commission, and
rate filings for disability income and long-term care insurance Products, and
give approval of those Products and rate filings that satisfy the applicable
Uniform Standard, where such approval shall have the force and effect of law
and be binding on the Compacting States to the extent and in the manner
provided in the Compact;

4.
To
receive and review in an expeditious manner Advertisement relating to long-term
care insurance products for which Uniform Standards have been adopted by the
Commission and give approval to all Advertisement that satisfies the applicable
Uniform Standard. For any product covered under this Compact, other than
long-term care insurance products, the Commission shall have the authority to
require an insurer to submit all or any part of its Advertisement with respect
to that product for review or approval prior to use, if the Commission
determines that the nature of the product is such that an Advertisement of the
product could have the capacity or tendency to mislead the public. The actions
of the Commission as provided in this section shall have the force and effect
of law and shall be binding in the Compacting States to the extent and in the
manner provided in the Compact;

5.
To exercise its rule-making authority and designate Products and Advertisement
that may be subject to a self-certification process without the need for prior
approval by the Commission;

6.
To
promulgate Operating Procedures, pursuant to Article VII of this Compact, which
shall be binding in the Compacting States to the extent and in the manner
provided in this Compact;

7.
To
bring and prosecute legal proceedings or actions in its name as the Commission;
provided, that the standing of any state insurance department to sue or be sued
under applicable law shall not be affected;

8.
To issue subpoenas requiring the
attendance and testimony of witnesses and the production of evidence;

11.
To borrow, accept or contract for services of personnel, including, but not
limited to, employees of a Compacting State;

12.
To hire employees, professionals or
specialists, and elect or appoint officers, and to fix their compensation,
define their duties and give them appropriate authority to carry out the
purposes of the Compact, and determine their qualifications; and to establish
the Commission's personnel policies and programs relating to, among other
things, conflicts of interest, rates of compensation and qualifications of
personnel;

13.
To accept any and
all appropriate donations and grants of money, equipment, supplies, materials
and services, and to receive, utilize and dispose of the same; provided that at
all times the Commission shall strive to avoid any appearance of impropriety;

14.
To lease, purchase, accept
appropriate gifts or donations of, or otherwise to own, hold, improve or use,
any property, real, personal or mixed; provided that at all times the
Commission shall strive to avoid any appearance of impropriety;

23.
To appoint committees,
including advisory committees comprising members, state insurance regulators,
state legislators or their representatives, insurance industry and consumer
representatives, and such other interested persons as may be designated in the
Bylaws;

24.
To provide and receive
information from, and to cooperate with law enforcement agencies;

26.
To perform such other
functions as may be necessary or appropriate to achieve the purposes of this
Compact consistent with the state regulation of the business of insurance.

Article V. Organization of the Commission

1.
Membership, Voting and Bylaws a . Each
Compacting State shall have and be limited to one member. Each member shall be
qualified to serve in that capacity pursuant to applicable law of the
Compacting State. Any member may be removed or suspended from office as
provided by the law of the State from which he or she shall be appointed. Any
vacancy occurring in the Commission shall be filled in accordance with the laws
of the Compacting State wherein the vacancy exists. Nothing herein shall be
construed to affect the manner in which a Compacting State determines the
election or appointment and qualification of its own Commissioner.b . Each
member shall be entitled to one vote and shall have an opportunity to
participate in the governance of the Commission in accordance with the Bylaws.
Notwithstanding any provision herein to the contrary, no action of the
Commission with respect to the promulgation of a Uniform Standard shall be
effective unless two-thirds (2/3) of the members vote in favor thereof.c . The
Commission shall, by a majority of the members, prescribe Bylaws to govern its
conduct as may be necessary or appropriate to carry out the purposes, and
exercise the powers, of the Compact, including, but not limited to:i .
Establishing the fiscal year of the Commission;ii . Providing reasonable
procedures for appointing and electing members, as well as holding meetings, of
the Management Committee;iii . Providing reasonable standards and procedures:
(i) for the establishment and meetings of other committees, and (ii) governing
any general or specific delegation of any authority or function of the
Commission;iv . Providing reasonable procedures for calling and conducting
meetings of the Commission that consists of a majority of Commission members,
ensuring reasonable advance notice of each such meeting and providing for the
right of citizens to attend each such meeting with enumerated exceptions
designed to protect the public's interest, the privacy of individuals, and
insurers' proprietary information, including trade secrets. The Commission may
meet in camera only after a majority of the entire membership votes to close a
meeting en toto or in part. As soon as practicable, the Commission must make
public (i) a copy of the vote to close the meeting revealing the vote of each
member with no proxy votes allowed, and (ii) votes taken during such meeting;v
. Establishing the titles, duties and authority and reasonable procedures for
the election of the officers of the Commission;vi . Providing reasonable
standards and procedures for the establishment of the personnel policies and
programs of the Commission. Notwithstanding any civil service or other similar
laws of any Compacting State the Bylaws shall exclusively govern the personnel
policies and programs of the Commission;vii . Promulgating a code of ethics to
address permissible and prohibited activities of commission members and
employees; and viii . Providing a mechanism for winding up the operations of
the Commission and the equitable disposition of any surplus funds that may
exist after the termination of the Compact after the payment and/or reserving
of all of its debts and obligations.d . The Commission shall publish its bylaws
in a convenient form and file a copy thereof and a copy of any amendments
thereto, with the appropriate agency or officer in each of the Compacting
States.

2.
Management Committee,
Officers and Personnel a . A Management Committee comprising no more than
fourteen (14) members shall be established as follows:i . One (1) member from
each of the six (6) Compacting States with the largest premium volume for
individual and group annuities, life, disability income and long-term care
insurance products, determined from the records of the NAIC for the prior
year;ii . Four (4) members from those Compacting States with at least two
percent (2%) of the market based on the premium volume described above, other
than the six (6) Compacting States with the largest premium volume, selected on
a rotating basis as provided in the Bylaws; and iii . Four (4) members from
those Compacting States with less than two percent (2%) of the market, based on
the premium volume described above, with one (1) selected from each of the four
(4) zone regions of the NAIC as provided in the Bylaws.b . The Management
Committee shall have such authority and duties as may be set forth in the
Bylaws, including but not limited to:i . Managing the affairs of the Commission
in a manner consistent with the Bylaws and purposes of the Commission;ii .
Establishing and overseeing an organizational structure within, and appropriate
procedures for, the Commission to provide for the creation of Uniform Standards
and other Rules, receipt and review of product filings, administrative and
technical support functions, review of decisions regarding the disapproval of a
product filing, and the review of elections made by a Compacting State to opt
out of a Uniform Standard; provided that a Uniform Standard shall not be
submitted to the Compacting States for adoption unless approved by two-thirds
(2/3) of the members of the Management Committee;iii . Overseeing the offices
of the Commission; and iv . Planning, implementing, and coordinating
communications and activities with other state, federal and local government
organizations in order to advance the goals of the Commission.c . The
Commission shall elect annually officers from the Management Committee, with
each having such authority and duties, as may be specified in the Bylaws.d .
The Management Committee may, subject to the approval of the Commission,
appoint or retain an executive director for such period, upon such terms and
conditions and for such compensation as the Commission may deem appropriate.
The executive director shall serve as secretary to the Commission, but shall
not be a member of the Commission. The executive director shall hire and
supervise such other staff as may be authorized by the Commission.

3.
Legislative and Advisory Committees a . A
legislative committee comprising state legislators or their designees shall be
established to monitor the operations of, and make recommendations to, the
Commission, including the Management Committee; provided that the manner of
selection and term of any legislative committee member shall be as set forth in
the Bylaws. Prior to the adoption by the Commission of any Uniform Standard
revision to the Bylaws, annual budget or other significant matter as may be
provided in the Bylaws, the Management Committee shall consult with and report
to the legislative committee.b . The Commission shall establish two (2)
advisory committees, one of which shall comprise consumer representatives
independent of the insurance industry, and the other comprising insurance
industry representatives.c . The Commission may establish additional advisory
committees as its Bylaws may provide for the carrying out of its functions.

The Commission shall maintain its corporate books and records
in accordance with the Bylaws.

5.
Qualified Immunity, Defense and
Indemnification a . The members, officers, executive director, employees and
representatives of the Commission shall be immune from suit and liability,
either personally or in their official capacity, for any claim for damage to or
loss of property or personal injury or other civil liability caused by or
arising out of any actual or alleged act, error or omission that occurred, or
that the person against whom the claim is made had a reasonable basis for
believing occurred within the scope of Commission employment, duties or
responsibilities; provided, that nothing in this paragraph shall be construed
to protect any such person from suit and/or liability for any damage, loss,
injury or liability caused by intentional or willful and wanton misconduct of
that person.b . The Commission shall defend any member, officer, executive
director, employee or representative of the Commission in any civil action
seeking to impose liability arising out of any actual or alleged act, error or
omission that occurred within the scope of Commission employment, duties or
responsibilities, or that the person against whom the claim is made had a
reasonable basis for believing occurred within the scope of Commission
employment, duties or responsibilities; provided, that nothing herein shall be
construed to prohibit that person from retaining his or her own counsel; and
provided further, that the actual or alleged act, error or omission did not
result from that person's intentional or willful and wanton misconduct.c . The
Commission shall indemnify and hold harmless any member, officer, executive
director, employee or representative of the Commission for the amount of any
settlement or judgment obtained against that person arising out of any actual
or alleged act, error or omission that occurred within the scope of Commission
employment, duties or responsibilities, or that such person had a reasonable
basis for believing occurred with the scope of Commission employment, duties or
responsibilities, provided, that the actual or alleged act, error or omission
did not result from the intentional or willful and wanton misconduct of that
person.

Article VI. Meetings and Acts of the Commission

1.
The Commission shall meet and take such
actions as are consistent with the provisions of this Compact and Bylaws.

2.
Each member of the Commission
shall have the right and power to cast a vote to which that Compacting State is
entitled and to participate in the business and affairs of the Commission. A
member shall vote in person or by such other means as provided in the Bylaws.
The Bylaws may provide for members' participation in meetings by telephone or
other means of communication.

3.
The Commission shall meet at least once during each calendar year. Additional
meetings shall be held as set forth in the Bylaws.

Article VII. Rules and Operating Procedures: Rulemaking
Functions of the Commission and Opting Out of Uniform Standards

1.
Rulemaking Authority. The Commission shall
promulgate reasonable Rules, including Uniform Standards, and Operating
Procedures in order to effectively and efficiently achieve the purposes of this
Compact. Notwithstanding the foregoing, in the event the Commission exercises
its rulemaking authority in a manner that is beyond the scope of the purposes
of this Act, or the powers granted hereunder, then such an action by the
Commission shall be invalid and have no force and effect.

2.
Rulemaking Procedure. Rules and Operating
Procedures shall be made pursuant to a rulemaking process that conforms to the
Model State Administrative Procedure Act of 1981 as amended, as may be
appropriate to the operations of the Commission. Before the Commission adopts a
Uniform Standard, the Commission shall give written notice to the relevant
state legislative committee(s) in each Compacting State responsible for
insurance issues of its intention to adopt the Uniform Standard. The Commission
in adopting a Uniform Standard shall consider fully all submitted materials and
issue a concise explanation of its decision.

3.
Effective Date and Opt Out of a Uniform
Standard. A Uniform Standard shall become effective ninety (90) days after its
promulgation by the Commission or such later date as the Commission may
determine; provided, however, that a Compacting State may opt out of a Uniform
Standard as provided in this Article. "Opt out" shall be defined as any action
by a Compacting State to decline to adopt or participate in a promulgated
Uniform Standard. All other Rules and Operating Procedures, and amendments
thereto, shall become effective as of the date specified in each Rule,
Operating Procedure or amendment.

4.
Opt Out Procedure. A Compacting State may
opt out of a Uniform Standard, either by legislation or regulation duly
promulgated by the Insurance Department under the Compacting State's
Administrative Procedure Act. If a Compacting State elects to opt out of a
Uniform Standard by regulation, it must (a) give written notice to the
Commission no later than ten (10) business days after the Uniform Standard is
promulgated, or at the time the State becomes a Compacting State and (b) find
that the Uniform Standard does not provide reasonable protections to the
citizens of the State, given the conditions in the State. The Commissioner
shall make specific findings of fact and conclusions of law, based on a
preponderance of the evidence, detailing the conditions in the State which
warrant a departure from the Uniform Standard and determining that the Uniform
Standard would not reasonably protect the citizens of the State. The
Commissioner must consider and balance the following factors and find that the
conditions in the State and needs of the citizens of the State outweigh: (i)
the intent of the legislature to participate in, and the benefits of, an
interstate agreement to establish national uniform consumer protections for the
Products subject to this Act; and (ii) the presumption that a Uniform Standard
adopted by the Commission provides reasonable protections to consumers of the
relevant Product.

Notwithstanding the foregoing, a Compacting State may, at the
time of its enactment of this Compact, prospectively opt out of all Uniform
Standards involving long-term care insurance products by expressly providing
for such opt out in the enacted Compact, and such an opt out shall not be
treated as a material variance in the offer or acceptance of any State to
participate in this Compact. Such an opt out shall be effective at the time of
enactment of this Compact by the Compacting State and shall apply to all
existing Uniform Standards involving long-term care insurance products and
those subsequently promulgated.

5.
Effect of Opt Out. If a Compacting State
elects to opt out of a Uniform Standard, the Uniform Standard shall remain
applicable in the Compacting State electing to opt out until such time the opt
out legislation is enacted into law or the regulation opting out becomes
effective.

Once the opt out of a Uniform Standard by a Compacting State
becomes effective as provided under the laws of that State, the Uniform
Standard shall have no further force and effect in that State unless and until
the legislation or regulation implementing the opt out is repealed or otherwise
becomes ineffective under the laws of the State. If a Compacting State opts out
of a Uniform Standard after the Uniform Standard has been made effective in
that State, the opt out shall have the same prospective effect as provided
under Article XIV for withdrawals.

6.
Stay of Uniform Standard. If a Compacting
State has formally initiated the process of opting out of a Uniform Standard by
regulation, and while the regulatory opt out is pending, the Compacting State
may petition the Commission, at least fifteen (15) days before the effective
date of the Uniform Standard, to stay the effectiveness of the Uniform Standard
in that State. The Commission may grant a stay if it determines the regulatory
opt out is being pursued in a reasonable manner and there is a likelihood of
success. If a stay is granted or extended by the Commission, the stay or
extension thereof may postpone the effective date by up to ninety (90) days,
unless affirmatively extended by the Commission; provided, a stay may not be
permitted to remain in effect for more than one (1) year unless the Compacting
State can show extraordinary circumstances which warrant a continuance of the
stay, including, but not limited to, the existence of a legal challenge which
prevents the Compacting State from opting out. A stay may be terminated by the
Commission upon notice that the rulemaking process has been terminated.

7.
Not later than thirty (30) days
after a Rule or Operating Procedure is promulgated, any person may file a
petition for judicial review of the Rule or Operating Procedure; provided, that
the filing of such a petition shall not stay or otherwise prevent the Rule or
Operating Procedure from becoming effective unless the court finds that the
petitioner has a substantial likelihood of success. The court shall give
deference to the actions of the Commission consistent with applicable law and
shall not find the Rule or Operating Procedure to be unlawful if the Rule or
Operating Procedure represents a reasonable exercise of the Commission's
authority.

Article VIII. Commission Records and Enforcement

1.
The Commission shall promulgate Rules
establishing conditions and procedures for public inspection and copying of its
information and official records, except such information and records involving
the privacy of individuals and insurers' trade secrets. The Commission may
promulgate additional Rules under which it may make available to federal and
state agencies, including law enforcement agencies, records and information
otherwise exempt from disclosure, and may enter into agreements with such
agencies to receive or exchange information or records subject to nondisclosure
and confidentiality provisions.

2.
Except as to privileged records, data and information, the laws of any
Compacting State pertaining to confidentiality or nondisclosure shall not
relieve any Compacting State Commissioner of the duty to disclose any relevant
records, data or information to the Commission; provided, that disclosure to
the Commission shall not be deemed to waive or otherwise affect any
confidentiality requirement; and further provided, that, except as otherwise
expressly provided in this Act, the Commission shall not be subject to the
Compacting State's laws pertaining to confidentiality and nondisclosure with
respect to records, data and information in its possession. Confidential
information of the Commission shall remain confidential after such information
is provided to any Commissioner.

3.
The Commission shall monitor Compacting
States for compliance with duly adopted Bylaws, Rules, including Uniform
Standards, and Operating Procedures. The Commission shall notify any
non-complying Compacting State in writing of its non-compliance with Commission
Bylaws, Rules or Operating Procedures. If a non-complying Compacting State
fails to remedy its noncompliance within the time specified in the notice of
noncompliance, the Compacting State shall be deemed to be in default as set
forth in Article XIV.

4.
The
Commissioner of any State in which an Insurer is authorized to do business, or
is conducting the business of insurance, shall continue to exercise his or her
authority to oversee the market regulation of the activities of the Insurer in
accordance with the provisions of the State's law. The Commissioner's
enforcement of compliance with the Compact is governed by the following
provisions:a . With respect to the Commissioner's market regulation of a
Product or Advertisement that is approved or certified to the Commission, the
content of the Product or Advertisement shall not constitute a violation of the
provisions, standards or requirements of the Compact except upon a final order
of the Commission, issued at the request of a Commissioner after prior notice
to the Insurer and an opportunity for hearing before the Commission.b . Before
a Commissioner may bring an action for violation of any provision, standard or
requirement of the Compact relating to the content of an Advertisement not
approved or certified to the Commission, the Commission, or an authorized
Commission officer or employee, must authorize the action. However,
authorization pursuant to this paragraph does not require notice to the
Insurer, opportunity for hearing or disclosure of requests for authorization or
records of the Commission's action on such requests.

Article IX. Dispute Resolution

The Commission shall attempt, upon the request of a member, to
resolve any disputes or other issues that are subject to this Compact and which
may arise between two or more Compacting States, or between Compacting States
and Non-compacting States, and the Commission shall promulgate an Operating
Procedure providing for resolution of such disputes.

Article X. Product Filing and Approval

1.
Insurers and Third-Party Filers seeking to
have a Product approved by the Commission shall file the Product with, and pay
applicable filing fees to, the Commission. Nothing in this Act shall be
construed to restrict or otherwise prevent an insurer from filing its Product
with the insurance department in any State wherein the insurer is licensed to
conduct the business of insurance, and such filing shall be subject to the laws
of the States where filed.

2.
The
Commission shall establish appropriate filing and review processes and
procedures pursuant to Commission Rules and Operating Procedures.
Notwithstanding any provision herein to the contrary, the Commission shall
promulgate Rules to establish conditions and procedures under which the
Commission will provide public access to Product filing information. In
establishing such Rules, the Commission shall consider the interests of the
public in having access to such information, as well as protection of personal
medical and financial information and trade secrets, that may be contained in a
Product filing or supporting information.

3.
Any Product approved by the Commission may
be sold or otherwise issued in those Compacting States for which the Insurer is
legally authorized to do business.

Article XI. Review of Commission Decisions Regarding Filings

1.
Not later than thirty (30) days
after the Commission has given notice of a disapproved Product or Advertisement
filed with the Commission, the Insurer or Third Party Filer whose filing was
disapproved may appeal the determination to a review panel appointed by the
Commission. The Commission shall promulgate Rules to establish procedures for
appointing such review panels and provide for notice and hearing. An allegation
that the Commission, in disapproving a Product or Advertisement filed with the
Commission, acted arbitrarily, capriciously, or in a manner that is an abuse of
discretion or otherwise not in accordance with the law, is subject to judicial
review in accordance with Article III, Section 4.

2.
The Commission shall have authority to
monitor, review and reconsider Products and Advertisement subsequent to their
filing or approval upon a finding that the product does not meet the relevant
Uniform Standard. Where appropriate, the Commission may withdraw or modify its
approval after proper notice and hearing, subject to the appeal process in
Section 1 above.

Article XII. Finance

1.
The Commission shall pay or provide for
the payment of the reasonable expenses of its establishment and organization.
To fund the cost of its initial operations, the Commission may accept
contributions and other forms of funding from the National Association of
Insurance Commissioners, Compacting States and other sources. Contributions and
other forms of funding from other sources shall be of such a nature that the
independence of the Commission concerning the performance of its duties shall
not be compromised.

2.
The
Commission shall collect a filing fee from each Insurer and Third Party Filer
filing a product with the Commission to cover the cost of the operations and
activities of the Commission and its staff in a total amount sufficient to
cover the Commission's annual budget.

3.
The Commission's budget for a fiscal year
shall not be approved until it has been subject to notice and comment as set
forth in Article VII of this Compact.

4.
The Commission shall be exempt from all
taxation in and by the Compacting States.

5.
The Commission shall not pledge the credit
of any Compacting State, except by and with the appropriate legal authority of
that Compacting State.

6.
The
Commission shall keep complete and accurate accounts of all its internal
receipts, including grants and donations, and disbursements of all funds under
its control. The internal financial accounts of the Commission shall be subject
to the accounting procedures established under its Bylaws. The financial
accounts and reports including the system of internal controls and procedures
of the Commission shall be audited annually by an independent certified public
accountant. Upon the determination of the Commission, but no less frequently
than every three (3) years, the review of the independent auditor shall include
a management and performance audit of the Commission. The Commission shall make
an Annual Report to the Governor and the legislature of the Compacting States,
which shall include a report of the independent audit. The Commission's
internal accounts shall not be confidential and such materials may be shared
with the Commissioner of any Compacting State upon request provided, however,
that any work papers related to any internal or independent audit and any
information regarding the privacy of individuals and insurers' proprietary
information, including trade secrets, shall remain confidential.

7.
No Compacting State shall have any claim
to or ownership of any property held by or vested in the Commission or to any
Commission funds held pursuant to the provisions of this Compact.

2.
The Compact
shall become effective and binding upon legislative enactment of the Compact
into law by two Compacting States; provided, the Commission shall become
effective for purposes of adopting Uniform Standards for, reviewing, and giving
approval or disapproval of, Products filed with the Commission that satisfy
applicable Uniform Standards only after twenty-six (26) States are Compacting
States or, alternatively, by States representing greater than forty percent
(40%) of the premium volume for life insurance, annuity, disability income and
long-term care insurance products, based on records of the NAIC for the prior
year. Therefore, it shall become effective and binding as to any other
Compacting State upon enactment of the Compact into law by that State.

3.
Amendments to the Compact may
be proposed by the Commission for enactment by the Compacting States. No
amendment shall become effective and binding upon the Commission and the
Compacting States unless and until all Compacting States enact the amendment
into law.

Article XIV. Withdrawal, Default and Termination

1.
Withdrawal a . Once effective, the Compact
shall continue in force and remain binding upon each and every Compacting
State; provided, that a Compacting State may withdraw from the Compact
("Withdrawing State") by enacting a statute specifically repealing the statute
which enacted the Compact into law.b . The effective date of withdrawal is the
effective date of the repealing statute. However, the withdrawal shall not
apply to any product filings approved or self-certified, or any Advertisement
of such products, on the date the repealing statute becomes effective, except
by mutual agreement of the Commission and the Withdrawing State unless the
approval is rescinded by the Withdrawing State as provided in Paragraph e of
this section.c . The Commissioner of the Withdrawing State shall immediately
notify the Management Committee in writing upon the introduction of legislation
repealing this Compact in the Withdrawing State.d . The Commission shall notify
the other Compacting States of the introduction of such legislation within ten
(10) days after its receipt of notice thereof.e . The Withdrawing State is
responsible for all obligations, duties and liabilities incurred through the
effective date of withdrawal, including any obligations, the performance of
which extend beyond the effective date of withdrawal, except to the extent
those obligations may have been released or relinquished by mutual agreement of
the Commission and the Withdrawing State. The Commission's approval of Products
and Advertisement prior to the effective date of withdrawal shall continue to
be effective and be given full force and effect in the Withdrawing State,
unless formally rescinded by the Withdrawing State in the same manner as
provided by the laws of the Withdrawing State for the prospective disapproval
of products or advertisement previously approved under state law.f .
Reinstatement following withdrawal of any Compacting State shall occur upon the
effective date of the Withdrawing State reenacting the Compact.

2.
Default a . If the Commission determines
that any Compacting State has at any time defaulted ("Defaulting State") in the
performance of any of its obligations or responsibilities under this Compact,
the Bylaws or duly promulgated Rules or Operating Procedures, then, after
notice and hearing as set forth in the Bylaws, all rights, privileges and
benefits conferred by this Compact on the Defaulting State shall be suspended
from the effective date of default as fixed by the Commission. The grounds for
default include, but are not limited to, failure of a Compacting State to
perform its obligations or responsibilities, and any other grounds designated
in Commission Rules. The Commission shall immediately notify the Defaulting
State in writing of the Defaulting State's suspension pending a cure of the
default. The Commission shall stipulate the conditions and the time period
within which the Defaulting State must cure its default. If the Defaulting
State fails to cure the default within the time period specified by the
Commission, the Defaulting State shall be terminated from the Compact and all
rights, privileges and benefits conferred by this Compact shall be terminated
from the effective date of termination.b . Product approvals by the Commission
or product self-certifications, or any Advertisement in connection with such
product, that are in force on the effective date of termination shall remain in
force in the Defaulting State in the same manner as if the Defaulting State had
withdrawn voluntarily pursuant to Section 1 of this article.c . Reinstatement
following termination of any Compacting State requires a reenactment of the
Compact.

3.
Dissolution of Compact
a . The Compact dissolves effective upon the date of the withdrawal or default
of the Compacting State which reduces membership in the Compact to one
Compacting State.b . Upon the dissolution of this Compact, the Compact becomes
null and void and shall be of no further force or effect, and the business and
affairs of the Commission shall be wound up and any surplus funds shall be
distributed in accordance with the Bylaws.

Article XV. Severability and Construction

1.
The provisions of this Compact shall be
severable; and if any phrase, clause, sentence or provision is deemed
unenforceable, the remaining provisions of the Compact shall be enforceable.

2.
The provisions of this Compact
shall be liberally construed to effectuate its purposes.

Article XVI. Binding Effect of Compact and Other Laws

1.
Other Laws a . Nothing herein prevents the
enforcement of any other law of a Compacting State, except as provided in
Paragraph b of this section.b . For any Product approved or certified to the
Commission, the Rules, Uniform Standards and any other requirements of the
Commission shall constitute the exclusive provisions applicable to the content,
approval and certification of such Products. For Advertisement that is subject
to the Commission's authority, any Rule, Uniform Standard or other requirement
of the Commission which governs the content of the Advertisement shall
constitute the exclusive provision that a Commissioner may apply to the content
of the Advertisement. Notwithstanding the foregoing, no action taken by the
Commission shall abrogate or restrict: (i) the access of any person to state
courts; (ii) remedies available under state law related to breach of contract,
tort, or other laws not specifically directed to the content of the Product;
(iii) state law relating to the construction of insurance contracts; or (iv)
the authority of the attorney general of the state, including but not limited
to maintaining any actions or proceedings, as authorized by law.c . All
insurance products filed with individual States shall be subject to the laws of
those States.

2.
Binding Effect of
this Compact a . All lawful actions of the Commission, including all Rules and
Operating Procedures promulgated by the Commission, are binding upon the
Compacting States.b . All agreements between the Commission and the Compacting
States are binding in accordance with their terms.c . Upon the request of a
party to a conflict over the meaning or interpretation of Commission actions,
and upon a majority vote of the Compacting States, the Commission may issue
advisory opinions regarding the meaning or interpretation in dispute.d . In the
event any provision of this Compact exceeds the constitutional limits imposed
on the legislature of any Compacting State, the obligations, duties, powers or
jurisdiction sought to be conferred by that provision upon the Commission shall
be ineffective as to that Compacting State, and those obligations, duties,
powers or jurisdiction shall remain in the Compacting State and shall be
exercised by the agency thereof to which those obligations, duties, powers or
jurisdiction are delegated by law in effect at the time this Compact becomes
effective.